The broad, long-term objective of the proposed research is to understand the role of phonological processing in reading by children with mental retardation. Phonological processing (processing of the sound structure of speech) has been identified as critical in the process of learning to read, yet has been nearly ignored in research on reading by children with mental retardation. Also, research suggests that phonological processing may be orthogonal to intelligence, which means that it could be a relative strength for children with mental retardation, compared with other reading-related skills. If so, it could be capitalized on in reading instruction for children with mental retardation. The proposed research will investigate the relationship between phonological processing and intelligence with specific attention to children with mental retardation. The specific aims of the research are (l) To establish a viable theoretical framework within which to study the relationship of phonological processing to intelligence. Baddeley' s working memory theory will be used, with particular focus on the articulatory loop (AL) component. Competing task experimental methodology as well as large-sample individual differences methodology will be used to relate phonological processing to AL function. (2) To examine the relationship of intelligence to phonological processing. Using both group comparison and individual differences approaches, and using non- phonological measures for comparison, intelligence will be related to phonological processing measures as well as to AL function. (3) To examine the effects of phonological processing ability (AL function) and of intelligence on acquisition of phonological reading skills by children with mental retardation. A 9-week program of instruction in sound blending, letter-sound correspondence, and phonological reading is proposed for this purpose. The research will contribute to current understanding of mental abilities and of reading skill, as well as to efforts to increase independent functioning of children with mental retardation through development of reading skill.